TABLE 19.—AID-DLF development loan authorizations, July 1 to Dec. 31, 1961, by area, country, terms,1 and purpose 1 With respect to the terms for 2-step loans, the upper figure indicates terms to the borrower while the lower figure indicates those to the government. 2 Increase in an earlier loan. Part of a loan of $27 million, the balance of $20 million to be financed from the DLF liquidation account. Source: Agency for International Development. In line with the new legislative requirements, all loans authorized during the current period (including those from the DLF liquidation account) require repayment in U.S. dollars. ICA (AID) INVESTMENT GUARANTEE PROGRAM The investment guarantee program is designed to encourage private American investment in the developing countries by insuring the investment against nonconvertibility of local currencies and loss by reason of expropriation and damage from war. Interest in this program continued to increase during this 6-month period. To illustrate, 84 applications for guarantees were received in the first 3 months of the period and 111 applications were received in the 3 months ending December 31, 1961. Many changes were made during the period under review, both in the legislative authority and the administration of the program itself. The role of the Export-Import Bank as Agent for the administration of the ICA guaranty contracts was terminated on August 31, 1961, and assumed by ICA (later AID). The Foreign Assistance Act of 1961 expanded the program to include guarantees to wholly-owned foreign subsidiaries of American corporations and added "revolution and insurrection" to the already existing authority to guaranty against loss from war damage. Authority was granted for a general all-risk guaranty to cover up to 75 percent of the investment in certain specific high-priority cases and a special all-risk authority to assist pilot projects for low-cost housing in Latin American countries. Because of the change in the administration, new legislation, and the reorganization of the Agency, there were many policy and procedural questions to which answers were not readily available with the result that only 19 contracts of guarantee were written for a total of $25 million. Cumulative totals for guarantees written since the beginning of the program stood at 465 in number with a total value of $631,872,073; $479,062,060 of this was still outstanding. (See table 20.) Total fees collected through December 31, 1961, were $8,095,899. TABLE 20.-Specific risk guarantees issued by ICA (AID) through Dec. 31, 1961, by area and type of guaranty Although the total represents all guarantees issued through Dec. 31, 1961, as of that date the maximum outstanding liability was $479.06 million. * Including Greece. NOTE.-Detail will not necessarily add to totals due to rounding. Source: Agency for International Development. During this period, the new countries signing the necessary bilateral agreements to institute the Investment Guarantee Program were Uruguay and the Ivory Coast, for the coverages shown in table 21, and Pakistan extended its existing agreement for convertibility and expropriation to include war risk guarantees. This brought the total number of developing countries participating in the Investment Guaranty Program to 40, although agreements with Colombia, Guatemala, and Panama still had not been ratified by their legislative bodies. TABLE 21.-Countries where ICA (AID) investment guarantees are available, as of Dec. 31, 1961, by type of guarantee 1 Agreement not in force until ratified by country legislation. Source: Agency for International Development. Although the Mutual Security Act of 1959 excludes economically developed countries for purposes of the Investment Guarantee Program, guarantees are still available for the underdeveloped overseas dependencies of the following countries: The following countries also have signed the agreement to participate in the Investment Guarantee Program but due to the Mutual Security Act of 1959, guarantees may no longer be issued for investments there: Austria Finland Germany, Federal Republic of Ireland Italy Luxembourg Cuba signed the agreement in 1957 for convertibility and expropriation but due to conditions existing in that country the program is inoperative there. DLF (AID) The only extended risk guarantee issued during this period under the Development Loan Fund authority was one for $54 million to the Volta Aluminum Co., Ltd. (VALCO). This contract, authorized by the DLF and signed on August 31, 1961, consists of a guarantee against certain political risks which would hinder or prevent the owners from constructing and operating the VALCO smelter in Ghana, and a guarantee of convertibility and payment. B. The Peace Corps ESTABLISHMENT OF THE PEACE CORPS ON A TEMPORARY PILOT BASIS: Executive Order No. 10924, March 1, 1961 1 650. REQUEST FOR ESTABLISHMENT OF THE PEACE CORPS ON A PERMANENT BASIS: Message From the President (Kennedy) to the Congress, March 1, 1961 2 To the Congress of the United States: I recommend to the Congress the establishment of a permanent Peace Corps a pool of trained American men and women sent overseas by the U.S. Government or through private organizations and institutions to help foreign countries meet their urgent needs for skilled manpower. I have today signed an Executive order establishing a Peace Corps on a temporary pilot basis.3 The temporary Peace Corps will be a source of information and experience to aid us in formulating more effective plans for a permanent organization. In addition, by starting the Peace Corps now we will be able to begin training young men and women for oversea duty this summer with the objective of placing them in overseas positions by late fall. This temporary Peace Corps is being established under existing authority in the Mutual Security Act and will be located in the Department of State. Its initial expenses will be paid from appropriations currently available for our foreign aid program. Throughout the world the people of the newly developing nations are struggling for economic and social progress which reflects their 126 Fed. Reg. 1789; the Department of State Bulletin, Mar. 20, 1961, pp. 400401. 'H. Doc. 98, 87th Cong. (text as printed in the Department of State Bulletin, Mar. 20, 1961, pp. 401-403). 3 See the unnumbered title, supra. deepest desires. Our own freedom, and the future of freedom around the world, depend, in a very real sense, on their ability to build growing and independent nations where man can live in dignity, liberated from the bonds of hunger, ignorance, and poverty. One of the greatest obstacles to the achievement of this goal is the lack of trained men and women with the skill to teach the young and assist in the operation of development projects-men and women with the capacity to cope with the demands of swiftly evolving economies, and with the dedication to put that capacity to work in the villages, the mountains, the towns, and the factories of dozens of struggling nations. The vast task of economic development urgently requires skilled people to do the work of the society-to help teach in the schools, construct development projects, demonstrate modern methods of sanitation in the villages, and perform a hundred other tasks calling for training and advanced knowledge. To meet this urgent need for skilled manpower we are proposing the establishment of a Peace Corps-an organization which will recruit and train American volunteers, sending them abroad to work with the people of other nations. This organization will differ from existing assistance programs in that its members will supplement technical advisers by offering the specific skills needed by developing nations if they are to put technical advice to work. They will help provide the skilled manpower necessary to carry out the development projects planned by the host governments, acting at a working level and serving at great personal sacrifice. There is little doubt that the number of those who wish to serve will be far greater than our capacity to absorb them. The Peace Corps or some similar approach has been strongly advocated by Senator Humphrey, Representative Reuss and others in the Congress. It has received strong support from universities, voluntary agencies, student groups, labor unions, and business and professional organizations. Last session, the Congress authorized a study of these possibilities. Preliminary reports of this study show that the Peace Corps is feasible, needed, and wanted by many foreign countries. Most heartening of all, the initial reaction to this proposal has been an enthusiastic response by student groups, professional organizations, and private citizens everywhere-a convincing demonstration that we have in this country an immense reservoir of dedicated men and women willing to devote their energies and time and toil to the cause of world peace and human progress. Among the specific programs to which Peace Corps members can contribute are teaching in primary and secondary schools, especially as part of national English language teaching programs; participation in the worldwide program of malaria eradication; instruction and operation of public health and sanitation projects; aiding in village development through school construction and other programs; increasing rural agricultural productivity by assisting local farmers to use modern implements and techniques. The initial emphasis of these |